Do you have any third party plugins installed? If so, have you tried disabling them? (one was showng to cause a slowdown, but I don't have my office notes handy at the moment to remember which one)
Also, there was one obscure third party utiliity program (haxie) that also caused slowdowns in Liquify. (and again, my notes are at the office, so I don't recall the name)
And you can try the usual: trash/reset Photoshop's preferences.
Oh, and Lion still has a bunch of video driver bugs that Apple is continuing to work on.
Sorry I don't have more definite info right now.
No third party plug-ins. I do have some actions, but it was behaving badly before the actions were in the palette. I have reset preferences as well.
My business partner has nearly the same machine I do, and her Liquify is fine, the Graphics card is the main difference, so that is what was making me wonder if there was any specific info on if this particular graphics card had any other complaints.
Especially with Lion, it is possible that there are GPU specific driver bugs.
I'll have to check with the Liquify engineer once we get back to the office.
Thank you, Chris.
No NTFS external drives.
One other possibility - do you have any external drives or network volumes mounted? (regardless of format)
Try unmounting those volumes and see if it gets faster.